Atlanta’s Multifamily Vacancy Shrinks to Lowest Level in Nearly Three Years

Property fundamentals in the Atlanta multifamily market ended the second quarter on a positive trajectory, as vacancy improved and rents continued to rise. While deliveries remain elevated, they have moderated from the peak levels recorded in 2023 and 2024. The construction pipeline has contracted significantly, with approximately 16,200 units underway at midyear, down 50% from one year ago, as development activity returns closer to historical norms. Vacancy improved in the first half as the market absorbed a wave of new supply, supported by record levels of net absorption. For the fourth straight quarter, demand outpaced new deliveries, pushing vacancy down 220 basis points year over year and bringing the rate below 6% for the first time in nearly three years. Rent growth remained in positive territory, reflecting strengthening market conditions.

Sales activity in the Atlanta multifamily investment market accelerated in the first half of 2025, surpassing the same period in 2024 by nearly 90%. While still below long-term historical trends, this marks a notable improvement from the previous two years. The median sale price increased 3% year over year to $189,100 per unit as of the second quarter. The average vintage of traded properties is 1996, about two years older than in 2024, reflecting strong investor interest in mid-cycle assets with value-add potential. Transactions involving newer properties built since 2020 accounted for roughly 9% of sales, down from 19% last year. In 2025, in-place cap rates for quality assets with large discounts to replacement cost and value-add or operational upside have generally been sub-5%. High-quality, stabilized assets with no material upside have been trading in the mid-5% range. Investors continue to pursue yield and growth in fast-growing suburban and outer-suburban submarkets, where nearly 70% of 2025 transactions have occurred.

Looking ahead

Operating conditions are expected to continue stabilizing in the near term as the pace of supply growth moderates following peak completions in 2023 and 2024. Projects totaling approximately 17,300 units are forecast to come online in 2025, which is below the levels recorded in the previous two years but nearly 90% above the average from 2017 to 2022. As deliveries slow in the coming months, strong absorption is anticipated to keep pace with inventory growth, supporting further improvement in vacancy rates compared to the prior two years. Vacancy is forecast to end 2025 at 5.9%, down 130 basis points year over year, close the five-year average of 5.7%. Rent growth is expected to continue through year-end as the market absorbs new inventory at record-high levels.

Sales activity in the Atlanta multifamily investment market is expected to continue gaining momentum through the remainder of 2025, trending closer to long-term norms but still likely to lag historical averages. Properties built in the 2000s represent the largest share of transactions year-to-date, nearly 30%, highlighting investor interest in assets around 15-25 years old that are often well-positioned for value-add strategies or repositioning. While newer vintages have made up a smaller portion of recent trades, those assets are expected to enter the transaction pipeline more frequently in the second half of the year. Cap rates may compress slightly, though most deals continue to settle in the low-to-mid-5% range, a level that will likely hold in the near term. Overall, sales activity is projected to improve in the coming months, but a full return to traditional transaction levels may not materialize until 2026.

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